ED seizes assets worth ₹3.78 crore in Ponzi scam

Overview The Directorate of Enforcement (ED) , Kochi Zonal Office, has provisionally attached movable and immovable properties worth ₹3.78 crore belonging to individuals accused of operating a Ponzi scheme . This action underscores the ongoing efforts to combat financial fraud and protect investors from illicit schemes. Key Developments Details of the Attachment The attached assets represent the proceeds of crime generated by Muhammed Faisal , Abu Sufiyan , and their associates. The scheme, named My Club Traders , allegedly cheated unsuspecting investors by promising exorbitant returns. The properties include agricultural land, residential premises, commercial plots with office buildings, and bank accounts. Investigation Details The investigation was initiated based on multiple FIRs registered by the Kerala Police under various sections of the Indian Penal Code (IPC), 1860 . These cases related to cheating and fraud involving the collection of large deposits from the public under the guise of investment opportunities. Modus Operandi The accused promised unrealistic returns, such as 1% of the invested amount as daily profits on working days. The scheme functioned as a pyramid-style money circulation plan, falsely presented as legitimate trading in cryptocurrencies and other ventures. Investors were also promised a 10% binary commission for introducing new participants. Laundering and Asset Acquisition Money was collected in cash to avoid detection and laundered through shell companies such as M/s Princess Gold and Diamonds LLP and M/s Toll Deal Ventures LLP . The laundered funds were used to acquire assets. ED Action On June 4, 2025 , the ED conducted searches at five locations under the provisions of the Prevention of Money Laundering Act (PMLA) . Incriminating documents and materials, including diaries recording cash collections, investor details, financial transactions, and digital devices, were seized. UPSC Relevance This news is relevant to GS3 (Economy) and GS2 (Governance) . It highlights the issues of financial fraud, money laundering, and the role of regulatory bodies like the ED in preventing such crimes. Understanding the functioning of Ponzi schemes and the legal framework to combat them is crucial for the UPSC exam. Key Concepts for UPSC Ponzi Scheme: A fraudulent investment scheme where returns are paid to earlier investors using funds from new investors. Money Laundering: The process of concealing the origins of illegally obtained money. Prevention of Money Laundering Act (PMLA): Indian law enacted to combat money laundering. Enforcement Directorate (ED): A law enforcement agency responsible for investigating economic crimes and money laundering. Important Facts The ED attached assets worth ₹3.78 crore . The scheme was named My Club Traders . The accused promised 1% daily profits. Searches were conducted on June 4, 2025 . The investigation is based on FIRs registered by the Kerala Police .

ED seizes assets worth ₹3.78 crore in Ponzi scam

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ED seizes assets worth ₹3.78 crore in Ponzi scam

ED seizes assets worth ₹3.78 crore in Ponzi scam

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